Controlling the Welfare State: A Case Study of Retrenchment in the Netherlands

Dirk J Wolfson

Public Finance = Finances publiques, 1987, vol. 42, issue 2, 165-80

Abstract: Most of the debate on economic policy seems to be on whether we should play quantities on the demand side, or prices on the supply side. This paper takes a different approach. It shows how a welfare state suffering from widespread unemployment may be nudged toward equilibrium by playing quantities on the supply side, focusing on numbers rather than levels of incomes derived from the public sector as the crucial variable to control. The paper reviews two options: controlling the number of social security benefits by redistributing work over jobs, and controlling numbers of public sector employees through predetermined personnel/output ratios.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pfi:pubfin:v:42:y:1987:i:2:p:165-80

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